Usage of Consultants: Department briefing

Meeting report

WATER AFFAIRS AND FORESTRY PORTFOLIO COMMITTEE
10 June 2005
USAGE OF CONSULTANTS: DEPARTMENT BRIEFING

Chairperson: Ms C September (ANC)

Documents handed out:
Department briefing
Department use of consultants
Challenges and Responses

SUMMARY
The Department of Water Affairs and Forestry briefed the Committee on their policy fon the use of consultants implemented in August 2002. The Department invited consultants to tender for contracts in cases where they lacked the skills to undertake certain projects. They aimed to encourage historically disadvantaged individuals (HDIs) to participate in this tendering process. The Department’s expenditure on consultants had increased to R198 million in 2004/05 (from R166 million in 2003/04), an increase that was partly due to the loss of skilled, senior officials to the private sector. The Department had identified certain processes to manage its use of consultants, such as the establishment of a Supply Chain Management (SCM) office.

The Chairperson said that the Department had failed to explain to the Committee the relationship between its policy on the use of consultants and the Human Resources (HR) policy previously agreed to do. The Department officials apologised and explained how the variations in workload in different sections of the Department had led to the employment of consultants. Members then asked questions relating to the participation of HDIs in Department contracts, and about the training and recruitment of new staff. There was insufficient time for the Department to respond to all the questions and they promised to take up the matter with the Committee again in August after the Parliament recess.

MINUTES

Department briefing
Mr M Mabala, the Department Chief Financial Officer, said the Department’s primary reason for using consultants was the lack of the necessary expertise to perform specific projects and the incapacity to train or recruit additional staff. Section 217 of the Constitution recognised the need for government departments to employ consultants and required a procurement policy for contracting consultants that redressed historic social discrimination.

Mr J Madiba, the Department Director for Supply Chain Management (SCM), outlined the Department’s current policy for the appointment of Professional Service Providers (PSPs), which was implemented in August 2002 and revised in March 2003 to put into effect new legislation on Broad-Based Black Economic Empowerment (B-BBEE). The purposes of the Professional Service Provider policy were to increase the participation of historically disadvantaged individuals and to incorporate the Preferential Procurement Regulations of 2001. The Department aimed to evaluate project proposals and manage Professional Service Providers by means of a database that categorised them according to field of specialisation and HDI-ownership percentage.

The Department had spent R198 million on contracting 184 consultants in 2004/05, compared with R166 million on 130 contracts in 2003/04. Mr Mabala mentioned that one of the reasons for the increasing use of consultants was that highly skilled officials had been attracted away from the Department before they had passed on their knowledge.

Mr Madiba said that the Department was currently updating their Professional Service Provider policy to ensure that procurement processes were conducive to the involvement of HDIs. The Department also aimed to train project managers to control budgets and to manage consultants effectively. A Supply Chain Management office was also being established.

Discussion
The Chairperson expressed ‘extreme’ dissatisfaction with the Department’s presentation. The Committee’s view that the Department was making use of consultants in areas where they were not needed, was borne out of the Committee’s oversight visits to the Department. Consequently, the Committee had requested that the Department present a report that linked their policy on their use of consultants to their Human Resources (HR) strategy. Although the Department should put in place procurement policies in order to fulfil its financial obligations, these should be carried out together with the Department’s HR obligations. The Department’s report should not have focussed on Supply Chain Management in the main, but should have indicated a process for improving its policy on the use of consultants in terms of HR management.

Mr Mabala apologised on behalf of the Department for the inadequacy of the presentation and said that he would convey the Chairperson’s comments to the Director-General. The Department had not understood the Committee’s requirements for the report on its HR strategy. In retrospect, the Department should have combined its present report with a presentation made to the Committee the previous year on its HR strategy.

The Chairperson responded that the Department’s report ought to have been a ‘follow-up’ to its previous presentation on HR strategy. The Department had failed to adhere to its agreement with the Committee that its report would address two issues: the Department’s financial situation and its HR strategy.

Ms B Schreiner, Department Senior Executive Manager: Policy and Regulation, explained that they made use of consultants where specialist functions, which did not exist in the Department, were required for a limited period of time for which the Department did not want to create temporary posts. Secondly, workflow across the different sections of the Department was not constant: there were always ‘peaks’ and ‘troughs’ created by the varying distribution of projects across different directorates. Rather than dealing with the ‘peaks’ by building ‘permanent capacity’, the Department made use of consultants.

Ms Schreiner expressed concern that the Department was using consultants in areas where it should be creating internal, permanent capacity to carry out various functions. She questioned the ability of officials in the Department to manage consultants in a manner that ensured the Department was the ‘intelligent client’ of the consultant.

Mr J Arendse (ANC) noted that there was a disparity between the percentage of contracts given by the Department to HDIs (39.7%) and the percentage given to non-HDIs (60.3%) and enquired what the Department’s strategy was to deal with this imbalance. The Committee was concerned that the frequent use of consultants by the Department could have a negative impact on the delivery of services and so create recurrent problems.

Mr Arendse asked whether consultants could be compelled to work alongside officials in the Department who were developing their careers. Employees in other government departments were able to find ‘job satisfaction’ in their positions, and asked whether the Department was looking for individuals who wanted to build careers in fields specific to the Department, such as sanitation and water management.

Mr Mabala replied that the percentage of contracts given to HDI consultants had been 36% in 2002/03 and 50.9% in 2003/04. In the latter year, the Department had exceeded their target figures. The percentage of contracts given to HDIs had fallen back to 39.73% in 2004/05, and constituted a challenge to the Department. Mr Madiba added that the Department aimed to check on consultants regularly during the period of their contracts to ensure the continued participation of HDIs.

Mr D Maluleke (DA) commented that the Department’s presentation implied that there was a lack of skill in the Department to manage consultants. He asked whether it were possible for consultants to take on Department officials as their ‘understudies’. Mr Madiba answered that part of the Department’s strategy for improving their PSP policy was contracturally compel consultants to transfer teach skills to Department staff. The Department would only pay consultants once this clause had been carried out.

Mr M Sibuyana (IFP) noted that the Department’s presentation provided no details of the particular consultants used and the quality of services rendered. The present meeting was a result of the Committee’s oversight visits to the Department during which they had observed that the Department’s staff were ‘unqualified’ to perform their tasks. He asked what measures were being taken to address this problem. He further enquired whether the Department had determined a timeframe for minimising the use of consultants and maximising the use of their own staff.

Ms S Maine (ANC) asked whether the Department had a strategy for attracting new staffmembers and why the Department was finding it difficult to train new recruits.

Mr Arendse said that after the transfer of political power in 1994, many (mostly white) staffmembers of government departments went to work for consulting companies. He queried whether, since transformation, many black staff members were likewise leaving for consultancies.

The Chairperson pointed out the figure of 108 consultants used by the Policy and Regulations section of the Department during 2004/05, and asked why such a large number were used in the ‘nerve centre’ of the Department. As the strategies over the past 11 years to diminish the use of consultants had been unsuccessful, would the Department now consider formulating an ‘extraordinary’ strategy? South Africa was not producing enough trained engineers and scientists to provide the Department with skilled officials. The Public Service Commission was also not giving adequate assistance to government departments. Therefore the Department needed to act innovatively to recruit skilled staff.

Ms Schreiner responded that within the Department, there was a ‘core’ group of committed staffmembers, but the challenge was to attract new staff.

There was insufficient time for the Department to respond to all the questions put to them by Members. The Department promised to discuss further on the consultants issue with the Committee in August.

The meeting was adjourned.